Business

The determinants of the use of process control mechanisms in FDI decisions in headquarters-subsidiary relationships

C. Lin, Y. Chiao, et al.

Explore how Taiwanese firms strategize their foreign investments! This research by Chun-Chien Lin, Yu-Ching Chiao, Tung-Lung Chang, and Yu-Chen Chang reveals that the motivation behind foreign direct investment greatly influences how headquarters manage their subsidiaries. Delve into the surprising impacts of resource-seeking versus market-seeking motivations on corporate control mechanisms.

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Playback language: English

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Abstract

This study investigates how foreign direct investment (FDI) motivations and technological resource commitment affect headquarters' use of process control over subsidiaries. Using data from 1015 Taiwanese manufacturing firms investing in China in 2003, the study finds that headquarters use process control more when the primary FDI motivation is resource-seeking but less when it's market-seeking. The relationship between process control and FDI motivation is further moderated by technological resource commitment from the headquarters, subsidiary, and partners. The findings offer guidelines for Taiwanese multinational corporations (MNCs) in choosing control mechanisms.

Publisher

Humanities & Social Sciences Communications

Published On

Jul 20, 2023

Authors

Chun-Chien Lin, Yu-Ching Chiao, Tung-Lung Chang, Yu-Chen Chang

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